District turns a new leaf: board approves socially responsible investment policy

In one of the last board meetings of 2017, the Santa Clara Valley Water District board of directors voted to amend the district’s investment policy to promote socially responsible investment practices. In a unanimous vote on December 12, the board adopted a set of moral, ethical, environmental, social and governance guiding principles to lead investment decisions.

“As a government agency, it is our job to be judicious in the use of public funds. These principles keep us accountable and ensure we continue operating in an ethical manner while preserving jobs and the local economy.” Said Board Chair Richard P. Santos. “It’s about doing business the right way.”

The board also approved prioritizing local investment possibilities with California based banks and banks with less than $10 billion in assets, to keep funds in the local economy and promote local job growth. Prior to the amendment, the district’s investment policy was geared toward investing prudently by focusing on protecting district assets, obtaining the greatest yield, and an adequate degree of liquidity. Following the approved amendments Board Chair Santos stated, “We are doing all we can to follow financial guidelines and to make investments in Santa Clara County our first priority.”

Over the course of 10 months, staff researched industry definitions and established practices of socially responsible investing, while studying public agencies that have implemented socially responsible investment programs, such as the County of San Francisco and City of Portland. As part of the process, staff presented findings to the Board Policy and Planning Committee and solicited feedback from three board advisory committees, which include the Agricultural Water, Environmental and Water Resources and the Santa Clara Valley Water Commission.

Based on analysis and stakeholder feedback, district treasury staff developed a list of environmental, social and corporate governance priorities in accordance with the district’s mission and created an investment evaluation scorecard. Each category includes a set of priorities. For example, under the environmental category, institutions will be evaluated based on the company’s impacts or contributions to: climate change and pollution, energy efficiency and waste management, water use and management, and land use and management. Institutions will be rated based on current practices with information from publicly available sources like Glassdoor reviews and Newsweek Green Company Rankings, as well as various sources of financial information.

The revised investment policy keeps the district accountable and committed to providing Silicon Valley with safe, clean water for a healthy life, environment, and economy. The new guidelines enhance the district’s role as a leader in socially and environmentally responsible practices and governance allowing for resounding impacts to the larger community.

The district’s investment policy, including the recently adopted guidelines, is available at www.valleywater.org/investorrelations.aspx.

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